PayPal - Beware of PayPal, 6000 USD seized by Paypal

[FranGian]

First time poster, longtime Prestashop user.

I wanted to inform the forum of recent developments regarding acceptance of credit card payments related to PayPal.

PayPal has recently begun freezing assets in user accounts. My business is effected. PayPal has seized more than 6,000.00 USD. The 6000 USD has been frozen for more than 3 weeks and doesn't look like it is going to be released anytime soon. PayPal has informed me of the LOCK on all my sale proceeds and the freeze will last 180 days.

Since this has happened I've further researched the matter. A class action lawsuit has been filed in Chicago, IL, USA that has more than 500 effected class members as part of the suit, effected parties are growing daily.

http://www.lawyersandsettlements.com/articles/14403/consumer-financial-fraud-small-business-scams-class.html

I ***WARN*** all of you. Switch to a traditional merchant based credit card system before this happens to your shop.

My business is unable to fulfill orders, it looks like we may have to close shop after 2 years. Frankly, we are devastated here.

[Hughes]

That is sad. I thought Paypal was a little more professional then that. I will pass the word on.

That is too bad because I was just starting to use them for my online business..

Thanks for the head up.


Good luck with those guys....

[tomerg3]

The web is full of these types of stories, yet many users still like using it, because they offer the customer a higher level of protection.

The simplest solution (which I started doing) is to withdraw the money from your paypal account before it reaches a high balance, I never have more than $1,000 in my paypal account...

[Hughes]

Is there a maximum balance for paypal.

Thanks in advance....

[FranGian]

Is there a maximum balance for paypal.

Thanks in advance....

Maximum balance for PayPal?

I'd suggest no more than 250.00 USD

If you are using them, get your money out of there (your PayPal account) as soon as possible, into a Operating Bank account not linked to Paypal in any way.

When a credit card transaction takes place (at your shop) the only merchant who receives funds in the form of payment is PayPal (PayPal is the merchant). If you're relaying upon PayPal to credit you these funds..... hahaha, I'm crying, if the balance is high enough in PayPal, you're going to get screwed. PayPal profits when they screw you.

PayPal will "limit" your access to these funds, as I mentioned, does any Prestashop user wish to wake up and find thousands of dollars have been seized? Would that change your operating objectives for the day?

I'm looking at 180 days before I receive the funds which Visa, MasterCard, and all of the other bank credit cards have already funded..... to PayPal... my loss was not having a traditional Merchant account for credit card transactions.... I relayed upon PayPal for payment, and I am effectively out of business.

Paypal has told me, several times, wait the 180 days for those sale proceeds.

[Hughes]

This is scare. I have about $800 per month being added to my paypal account.

You also mentioned something about not connecting your own bank account to paypal? I usually transfer most of my funds to my own bank account as soon as I can. Should I be considering a different approach?

Thank you in advance...

[FranGian]

If an account of yours is linked to Paypal, which they can credit funds to you, your business... they can also debit funds against you, your business account. PayPal could seek to receive several hundred dollars in funds already credited to your account in the form of a debit against that account. Since you've allowed them to credit an account, you've allowed them to debit that account as well. Accounts need to be antonymous of each other, not linked for overdraft protection or PayPal will seize any funds they can.

Example, Paypal credits you 2600 USD. Then limits your account, then seeks, due to buyer fraud or "dispute" or in my case a "limitations" to debit your bank account 2600 USD. They charge back to your account whatever the balance is, if you are left outstanding the difference, not only has PayPal seized through the "limitations" proceeds all funds in the PayPal account, they've charged back your bank account, they then attempt to sue you for the difference they were not able to seize. And if you go crazy and complain politely, they suggest you file a lawsuit against them.

PayPal "held" a 241.87 transaction, now they've credited it, so I am shipping the consumer the products, today. I do not have access to those funds since all funds in the PayPal account have been "limited"

My customer/customers are more important to me than PayPal's seizure of those petty funds, now totaling 6300 USD.

PayPal will not put us out of business.

I've since dealt with my bank directly and opened a traditional merchant account accepting credit card payments at a lower percentage than PayPal was charging at 2.2% for online credit card orders.

I used PayPal only because the module was so easy to implement.

**ATTENTION** Developers - please provide e-commerce Prestashop users with online credit card payment acceptance the access to a traditional merchant based bank credit card solutions.

PayPal is terrible. Do not use the PayPal module.... or do so at your own risk.

This is scare. I have about $800 per month being added to my paypal account.

You also mentioned something about not connecting your own bank account to paypal? I usually transfer most of my funds to my own bank account as soon as I can. Should I be considering a different approach?

Thank you in advance...

[glenns]

Being a Power Seller on eBay for 6+ years I have heard of these stories but I have probably put 500,000 US over the years through PayPal and never had an issue, but I also maybe only had one chargeback in all those years and that was a misunderstanding.

If you have a lot of chargebacks or they suspect fraud then your acct may be limited....I am not defending PayPal as they are punks but I'm just sayin'.

Like others have said, as soon as money comes in take it out. Have two accounts at your bank. I have one that PP money goes to, then I immediately transfer it online to another checking account, that way if PP ever tries to pull anything there is nothing there for them to take, if they try and debit you can tell your bank I think that it was an unauthorized transaction by PayPal.

[DutchCoding]

Had this happen to 2 different B2B partners I had way back when I was selling things on ebay! I had my account frozen 4 times for get this. Earning too much money too fast. Had to send alot of proof I was not a laundring money then I got to get my account unfrozen. After that their nice buyer protection policy got scammers to do me over for about 1000 dollars in 2 months. I said enough and started a local business with National/Dutch payment providers that dont have these problems. Now I am back on the web I am very weary of scammers and the biggest scammer of all Paypal

[John Horton]

Don't get me started on PayPal. They are the most unethical bunch of cowboys on the planet. Some years ago I almost lost my shirt because of them.

What happens is that there rules are there to stop anybody
1 - stealing from them
2 - stealing from someone else and being able to blame them

Otherwise they don't care what happens.

I suggest
1- empty your PayPal account daily.
2- After you have registered a credit/debit card with them, cancel it and get a new one.
3- Set up multiple payment processors ready to go so you can switch at a moments notice.

I know so many people (innocent) people who have been inconvenienced by their 180 day funds freeze and almost wiped out by having funds permanently removed because of obviously fraudulent claims.

They operate from Luxembourg like all the less than honorable financial establishments that want to rip-off the euro-zone. And are not subject to the same legislation as a high street bank.

Unfortunately they do have a solid reputation amongst allot of the on-line buying public so they are a necessary evil.

Use them, but don't rely on them and have a back-up plan.

Hope I don't sound too bitter. You won't understand until it happens to you. >